Financial News Network
Encyclopedia
Television network
A television network is a telecommunications network for distribution of television program content, whereby a central operation provides programming to many television stations or pay TV providers. Until the mid-1980s, television programming in most countries of the world was dominated by a small...
that operated throughout the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
during the 1980s.
Founding
Financial News Network (FNN) was founded in 1981 by two men: Rodney Buchser, who had been general manager of KWHY, Channel 22 in Los AngelesLos Ángeles
Los Ángeles is the capital of the province of Biobío, in the commune of the same name, in Region VIII , in the center-south of Chile. It is located between the Laja and Biobío rivers. The population is 123,445 inhabitants...
and Glenn Taylor. The concept originated in New York City in 1975 on WBTB-TV, Channel 68. Eugene Inger, a registered investment adviser started his daily Wall Street programming in the Fall of 1975. Keith Houser was the G.M. Mr. Houser negotiated with the NY-SEC office to get the ticker tape to crawl across the bottom of the screen with a Two (2) hour delay, due to the SEC worrying that it might "destablize" the market. The ticker ran across the lower third
Lower thirds
In the television industry , a lower third is a graphic placed in the title safe lower area of the screen, though not necessarily the entire lower third of it, as the name suggests....
of the screen, with stock prices on the top (white) band and index prices on the bottom (blue) band. After the first year of programming the SEC permitted just a twenty (20) minute delay. KWHY was the first west coast TV station to offer daily market news accompanied by a digital stock ticker
Ticker tape
Ticker tape was the earliest digital electronic communications medium, transmitting stock price information over telegraph lines, in use between around 1870 through 1970...
"crawl" at the bottom of the screen. Los Angeles traders and investors could stay on top of market action without subscribing to an expensive stock quotation service. Computers at that time could not keep up with the full stock feed and as such the ticker could only show preselected stocks making the system highly manual and clumsy. The first fully automated stock ticker to appear on television was in 1996 on the CNNfn
CNNfn
CNNfn was a U.S. cable television news network operated by the CNN subsidiary of the media comglomerate Time Warner from December 29, 1995 and of AOL-Time Warner until December 15, 2004. The network was dedicated to covering financial markets and business news.It was available in a number of...
network.
With the earlier launch of CNN
CNN
Cable News Network is a U.S. cable news channel founded in 1980 by Ted Turner. Upon its launch, CNN was the first channel to provide 24-hour television news coverage, and the first all-news television channel in the United States...
by Ted Turner
Ted Turner
Robert Edward "Ted" Turner III is an American media mogul and philanthropist. As a businessman, he is known as founder of the cable news network CNN, the first dedicated 24-hour cable news channel. In addition, he founded WTBS, which pioneered the superstation concept in cable television...
blazing the trail, Buchser realized that newly available technology made possible the marriage of KWHY's live market reporting with on-screen quotes and Turner's concept of national news via satellite. The early history of FNN was not highly profitable and, within a few years, Buchser severed his relationship with the fledgling network to launch a financial marketing services firm called FMS Direct. In its early years FMS Direct produced infomercials and direct response television spots which more often than not, ran on FNN, the network he had helped to found. Harvey "Scott" Ellsworth, who was the creator and on-air host of the popular radio program, "Scott's Place", that aried on KFI-AM in Los Angeles from 1967 through 1974 IMDB Bio, was one of FNN's initial anchors.
Private financing
FNN received its early private financing from Biotech Capital Corporation, which later changed its name to Infotechnology, Inc. Biotech Capital was also one of the few publicly held "Business Development Companies" - governed by the Business Company Development Act of 1980.In 1981, shortly before its Initial Public Offering, led by the Paulson Investment Company, Mr. Taylor, then the Chairman, resigned due to previous legal difficulties. Mr. Jeremy Wiesen, a professor of business accounting and entrepreneurship at the Stern School of Business, New York University, and formerly with the Securities and Exchange Commission, became Chairman. The network's principal audience were small investors.
FNN's principal studio was in Santa Monica, California, but it then established operations in New York, on the ground floor of Merrill Lynch
Merrill Lynch
Merrill Lynch is the wealth management division of Bank of America. With over 15,000 financial advisors and $2.2 trillion in client assets it is the world's largest brokerage. Formerly known as Merrill Lynch & Co., Inc., prior to 2009 the firm was publicly owned and traded on the New York...
's headquarters in Manhattan
Manhattan
Manhattan is the oldest and the most densely populated of the five boroughs of New York City. Located primarily on the island of Manhattan at the mouth of the Hudson River, the boundaries of the borough are identical to those of New York County, an original county of the state of New York...
, where passersby could view its broadcast operations. Merrill Lynch was one of the initial private investors in FNN.
Over-the-air affiliates
At first, the channel aired only during daytime hours on a mix of broadcast stations and cable televisionCable television
Cable television is a system of providing television programs to consumers via radio frequency signals transmitted to televisions through coaxial cables or digital light pulses through fixed optical fibers located on the subscriber's property, much like the over-the-air method used in traditional...
providers. Over-the-air affiliates included:
- KSCIKSCIKSCI is an independent television station operating in Los Angeles and on KUAN-LP channel 48 in Poway, California, serving the San Diego area. It targets Asian Americans, and most of its programming is in Asian languages....
, Los Angeles - WATL, Atlanta (now a MyNetworkTVMyNetworkTVMyNetworkTV is a television broadcast syndication service in the United States, owned by the Fox Entertainment Group, a division of News Corporation...
affiliate) - WPWR-TVWPWR-TVWPWR-TV, channel 50, is a MyNetworkTV-affiliated television station licensed to Gary, Indiana, and serving the Chicago, Illinois area. WPWR-TV is owned by Fox Television Stations, a division of the News Corporation, and is a sister station to Fox network outlet WFLD-TV...
, Chicago (also MyNetwork TV) - KNXV, Phoenix (now an ABCAmerican Broadcasting CompanyThe American Broadcasting Company is an American commercial broadcasting television network. Created in 1943 from the former NBC Blue radio network, ABC is owned by The Walt Disney Company and is part of Disney-ABC Television Group. Its first broadcast on television was in 1948...
affiliate) - WSWS, Columbus, Georgia (now independent station WLGAWLGAWLGA was a television station in Opelika, Alabama. The channel broadcast in digital on UHF channel 47. Its studios were located in Opelika, with its transmitter located in Cusseta, Georgia...
) - KTWS (now KDFIKDFIKDFI-TV, virtual channel 27, is a MyNetworkTV-affiliated station serving the Dallas/Fort Worth area. The station is licensed to Dallas and owned by Fox Television Stations, a division of the News Corporation, and is a sister station to Fox network outlet KDFW . Its transmitter is located in Cedar...
), Dallas(now a MyNetworkTVMyNetworkTVMyNetworkTV is a television broadcast syndication service in the United States, owned by the Fox Entertainment Group, a division of News Corporation...
affiliate) - WKID (now WSCVWSCVWSCV Telemundo 51 is the Telemundo O&O that serves the Miami - Fort Lauderdale area and licensed to Fort Lauderdale. The transmitter is located in Miramar. The station also serves as the de facto Telemundo affiliate for the West Palm Beach market. The station is owned by NBCUniversal along with NBC...
), Miami/Ft. Lauderdale (now Telemundo) - WWSG-TV (now WPSGWPSGWPSG, channel 57, is a television station in Philadelphia, Pennsylvania. WPSG is owned by the CBS Corporation and is the east coast flagship station for the CW Television Network, which is owned jointly by CBS and Time Warner...
), Philadelphia(now a CWThe CW Television NetworkThe CW Television Network is a television network in the United States launched at the beginning of the 2006–2007 television season. It is a joint venture between CBS Corporation, the former owners of United Paramount Network , and Time Warner's Warner Bros., former majority owner of The WB...
affiliate) - WCCO-TVWCCO-TVWCCO-TV, is the CBS owned and operated television station that serves the Minneapolis-St. Paul area of Minnesota. Its transmitter is at the Telefarm complex in Shoreview, Minnesota.- History :...
Minneapolis, now a CBSCBSCBS Broadcasting Inc. is a major US commercial broadcasting television network, which started as a radio network. The name is derived from the initials of the network's former name, Columbia Broadcasting System. The network is sometimes referred to as the "Eye Network" in reference to the shape of...
owned-and-operated station
SCORE
In 1985, FNN severed ties with its broadcast stations and established a 24-hour feed on cable TV only. At night, it added SCORESCORE (television)
SCORE was a joint venture with Financial News Network which aired sports-themed programming in the 1980s. It began in 1985 and shut down six years later. It was renamed FNN Sports in 1990 when FNN decided to go with a 24-hour feed on weekdays. SCORE was forced to dissolve after CNBC bought out FNN...
, a mini-network that aired sports events and news. Also airing in the overnight hours was Venture, a series of long-form speeches by business leaders, and TelShop, a shop-at-home service.
In the late 1980s, Infotechnology Inc., the New York-based information technology and venture capital company (chaired by Earl Brian
Earl Brian
Dr. Earl Winfrey Brian, Jr. was a decorated combat surgeon with an aerial support unit for the United States Central Intelligence Agency's Vietnam War-era Phoenix Program...
) which also owned United Press International
United Press International
United Press International is a once-major international news agency, whose newswires, photo, news film and audio services provided news material to thousands of newspapers, magazines and radio and television stations for most of the twentieth century...
, increased its position to 47 percent, and remained one of FNN's largest shareholders. At its height, FNN was available on 3,500 cable systems, reaching a potential audience of 35 million homes across the country. FNN moved into newly built modern TV studios and production facilities in the Wang building in Los Angeles and in New York's Rockefeller Center
Rockefeller Center
Rockefeller Center is a complex of 19 commercial buildings covering between 48th and 51st streets in New York City, United States. Built by the Rockefeller family, it is located in the center of Midtown Manhattan, spanning the area between Fifth Avenue and Sixth Avenue. It was declared a National...
.
Financial scandals and accounting disputes
In 1990—only months after beginning its biggest advertising campaign ever—FNN fell prey to two of the main topics of its broadcasts, a financial scandal and an accounting dispute. During that year's audit, the network's auditor, Deloitte & Touche, discovered irregularities on the part of its chief financial officerChief financial officer
The chief financial officer or Chief financial and operating officer is a corporate officer primarily responsible for managing the financial risks of the corporation. This officer is also responsible for financial planning and record-keeping, as well as financial reporting to higher management...
, C. Steven Bolen. The irregularities were serious enough that Deloitte said its 1989 audit couldn't be relied upon. FNN launched an internal investigation and discovered what it called evidence of unauthorized payments that Bolen made to himself. Bolen was fired in October. In addition, Deloitte wanted FNN to report a $28 million investment into a data system for brokers as an expense. FNN claimed that this would push its balance sheet so far into the red that it would violate some covenants with its banks, as well as force a default on its line of credit
Line of credit
A line of credit is any credit source extended to a government, business or individual by a bank or other financial institution. A line of credit may take several forms, such as overdraft protection, demand loan, special purpose, export packing credit, term loan, discounting, purchase of...
. FNN replaced Deloitte with Coopers & Lybrand, and reported a $72.5 million loss for fiscal 1990. Needing a major cash infusion to stay in business, FNN put itself up for sale in November.
Proposed merger with CNBC
In February 1991, FNN reached a handshake agreement with a partnership of Dow Jones & CompanyDow Jones & Company
Dow Jones & Company is an American publishing and financial information firm.The company was founded in 1882 by three reporters: Charles Dow, Edward Jones, and Charles Bergstresser. Like The New York Times and the Washington Post, the company was in recent years publicly traded but privately...
and Westinghouse Broadcasting
Westinghouse Broadcasting
The Westinghouse Broadcasting Company, also known as Group W, was the broadcasting division of Westinghouse Electric Corporation. It owned several radio and television stations across the United States and distributed television shows for syndication....
(Group W) for $90 million. However, just a few days later, FNN agreed to an unexpected $105 million offer from NBC
NBC
The National Broadcasting Company is an American commercial broadcasting television network and former radio network headquartered in the GE Building in New York City's Rockefeller Center with additional major offices near Los Angeles and in Chicago...
, owner of FNN's then two-year-old rival, CNBC
CNBC
CNBC is a satellite and cable television business news channel in the U.S., owned and operated by NBCUniversal. The network and its international spinoffs cover business headlines and provide live coverage of financial markets. The combined reach of CNBC and its siblings is 390 million viewers...
. NBC had encountered problems getting cable systems to carry CNBC, and intended to merge CNBC with FNN (at the time, CNBC was only in 17 million homes). However, matters were complicated in March when FNN filed for Chapter 11 bankruptcy, triggering a lively bidding war for the network.
Group W and Dow Jones raised their offer to $115 million, only to be turned down on a technicality by Bankruptcy Court Judge Francis Conrad; Dow Jones and Group W refused to keep the bidding open until May 31, 1991. NBC then raised its offer to $115 million, which was accepted by Conrad. That decision, however, was overturned on appeal.
Group W/Dow Jones and CNBC both significantly raised their bids. Group W/Dow Jones offered $167 million, while CNBC offered $154 million. However, the CNBC bid included more cash, and the Dow Jones/Group W bid included payments that were tied to revenue targets over three years. Conrad awarded FNN to CNBC, feeling its deal was more realistic.
Closure
FNN went off the air for the last time at 6 pm on May 21, 1991. CNBC immediately took over FNN's satellite transponder space, more than doubling its audience at one stroke. It branded its business day programming as "CNBC/FNN Daytime" until 1992. CNBC incorporated features of FNN's ticker into its tickerCNBC Ticker
The CNBC Ticker is a computer simulation of ticker tapes shown as a crawl on the lower part of the TV screen on the business television network CNBC from Englewood Cliffs, New Jersey, in the U.S...
. While most of FNN's employees were fired, a few FNN anchors and reporters including Bill Griffeth
Bill Griffeth
Bill Griffeth is an American financial journalist from CNBC, the cable network he has been with since 1991.-Journalism career:Prior to joining CNBC, Griffeth was part of the production team that started the Financial News Network in 1981...
, Ron Insana
Ron Insana
Ron Insana is a reporter for Market Score Board Report with Ron Insana, syndicated by Compass, and a former Senior Analyst at CNBC. He was Managing Director of Insana Capital Partners from inception to collapse. He was the anchor of CNBC's "Street Signs", which aired weekdays during stock market...
, Allan Chernoff
Allan Chernoff
Allan Chernoff is CNN's award-winning Senior Correspondent and one of the nation's trailblazing journalists specializing in finance and business affairs.- Biography :...
and Joe Kernen
Joe Kernen
Joe Kernen is a CNBC news anchor. He is currently co-host of CNBC’s "Squawk Box". His nickname is "The Kahuna".Kernen came to CNBC in the 1991 merger with Financial News Network, having joined FNN after a 10-year career as a stockbroker.Kernen grew up in the Western Hills section of Cincinnati,...
were retained. Sue Herera
Sue Herera
Sue Herera is a television reporter for the CNBC financial television network. Herera earned a bachelor’s degree in journalism from California State University, Northridge in 1980 along with her co-anchor Bill Griffeth...
, who joined FNN at age 21 and very soon became an anchor, moved to NBC and the brand-new CNBC prior to the demise of FNN. Griffeth and Herera were later reunited at CNBC and co-anchor "Power Lunch" today.